LEIs are identification codes that enable consistent and accurate identification of all legal entities that are parties to financial transactions, including non-financial institutions.
There are certain fields within EMIR, MiFIR and SFTR which require populating with an LEI. All LEIs for these reporting regimes must be valid and included in the GLEIF database.
As a general overview:
- for new transactions, LEIs for the executing party cannot be lapsed and must have a status as per GLEIF as “Issued”, “Pending transfer” or “Pending archival”;
- for the other counterparty within a trade, their LEI is able to be “Lapsed” with GLEIF; and
- the Initial Registration Date of an LEI must be equal to or after the trade date.
LEIs are required for identifying counterparties that are legal entities (including those in trusts) in MiFID II transaction reports. ESMA has made it abundantly clear that investment firms must be able to identify a counterparty that is a legal entity in a transaction report by using an LEI and should not enter into a reportable transaction without one.
The LEI is mandatory in EMIR reports. Under Article 9 of EMIR, the LEI is required in order to identify counterparties, brokers and clearing members that are part of the reported transaction and that are eligible for an LEI.
Reporting obligation under SFTR
All relevant parties to a SFT transaction (beneficiaries, counterparties, broking entities and clearing members) need to be identified by the reporting entity with the correct LEI. This can be found in Article 2 of the Delegated Regulation (EU) 2019/363.
Summary of reporting fields per regime
Below we outline the primary fields which require LEIs to be populated for each regime. For each field, details are provided alongside as to whether the entered LEI can be lapsed or not in submission.
The regimes differ in terms of specific validation rules and action types, even though field names may be similar in some cases.
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LEIs are generated in accordance with the international standard document ISO 17442:2012 – Financial services — Legal Entity Identifier (LEI).
LEIs are issued by Local Operating Units (LOU) accredited by the Global LEI Foundation (GLEIF). A list of all Local Operating Units can be found on GLEIF’s website.
